End of 2015 Income Tax Year Checklist/Questionnaire. Our guide to help you collate your tax return information

Transcription

1 End of 2015 Income Tax Year Checklist/Questionnaire Our guide to help you collate your tax return information

2 Contents Section name Description Page Welcome & how to use this guide Provides a brief introduction and instructions on how to use this guide 1 Business financial statement checklist Explains the information we ll need if you received income from business activities 2 Home office schedule Explains the information we ll need if you operated your business from a home office 5 Look through company (LTC) checklist Explains the information we ll need if you received income from a look-through-company 5 Rental income checklist Explains the information we ll need if you received income from a rental property 6 Personal taxable income checklist Explains the information we ll need if you received income from other New Zealand sources 8 Overseas income checklist Explains the information we ll need if you received income from other overseas sources 9 Other information Provides additional space for you to provide additional comments that may be relevant 10 Acknowledgement Provides us with your authority to act on your behalf 11

3 Welcome Welcome to a new income tax year, which means it s time to file last year s income tax returns! Our primary goal remains to provide you with professional, efficient tax preparation & consulting. We continue to seek ways to improve & streamline our processes to achieve this and to minimise turnaround time. Every year, as we approach the end of tax season, with only one or two weeks to go, we receive a staggering number of returns to process, and while we scramble to accommodate everyone s needs, we find it difficult to accommodate everyone. Throughout the guide, we ve compiled some checklists for you to review & complete, where applicable. Each checklist contains a series of boxes for you to check off so you know you ve given us the information/documentation we require. For many sections, you ll not need to supply any information. If we already hold some of the information for the year (for example if we prepare your GST returns and cash books), we will generally require less information from you to begin our work. Though it may seem an inconvenience, the care you take in completing the checklists will help us to prepare your annual accounts efficiently and to the highest standards. I know that, for many, there s so much to remember and collate when collating information ready to send to us. That s why we ve designed this guide to help. I hope you find it useful. As always, thank you for your business and referrals, and I look forward to hearing from you soon. All the best for the year. Mark Gwilliam FCCA MinstD Director How to use this guide We ve written this guide to help you to gather the information we need to prepare your 2015 financial statements and income tax returns. The information required relates to the tax year from 1 April 2014 to 31 March If your income year is different, please contact us. Inland Revenue Department and our own professional accounting bodies require us to obtain the information requested in these checklists. The details you provide can also help to save time - delays and increased fees are inevitable if we need to disturb you to obtain missing information, trace transactions, or decipher illegible handwriting. If, after reading this guide, you have any questions, or need help with it, please call us on When you ve gathered your tax information, please call for an appointment or if you feel an appointment is unnecessary, simply mail/ your information to us. Please ensure you sign the acknowledgement page on page 13. We aim to process tax returns in the order that they re received. If you have a specific deadline or other time constraint, please let us know. In the middle of difficulty, lies opportunity - Albert Einstein Page 1

4 Business financial statement checklist & information To help us prepare your financial statements, please supply the following, where applicable: Bank statements/cash book/software Please provide us with your details using one of the following options: Option 1: Accounting software MYOB a copy of your backup with your username and password; MYOB Live products please invite one of our team as a user; QuickBooks a copy of your backup with your username and password; Xero please invite one of our team as a user For all other accounting software applications please provide us with printouts, excel spreadsheets or PDF s of your detailed general ledger, bank reconciliations, debtors and creditors reports Option 2: Cash Book Please supply: A reconciled cash book with clear description of payments and receipts; and March 2015 bank statements showing the balance as at 31 March 2015; and Bank statements for any business bank accounts not recorded in a cash book. Option 3: Bank statements, cheque & deposit For all accounts operated by the business, statements should cover the full period from 1 April 2014 to 31 March For all business bank accounts please clearly mark the nature of all payments and deposits or supply cheque and deposit books. Out of pocket expenses Please supply details & receipts of business expenses paid from private sources (personal bank accounts, credit cards, etc) during the year including payee & expense description please record the GST inclusive amount. Cash on hand $ Takings not yet banked. Petty cash float. Till float. Cash received during year but not banked Please provide details of unbanked/undeclared income and details of how it was spent (drawings, banked into another account, business expenses, etc) Stock/WIP $ Work-in-progress. Stock sold on consignment. Stock in transit. Goods taken for own use but not paid for Please supply details of any business goods taken for your own use but not paid for, including description and cost including GST. Please indicate whether or not these have been adjusted for in GST returns. Accounts receivables Please list any amounts owing to you as at 31 March Clearly mark any doubtful debts i.e. debtors Education a continuing, never-ending process -Nido Qubein Page 2

5 that, as at 31 March 2015, you believe you will be unable to collect/fully collect. Note: Bad debts must be written off in your debtors ledger by 31 March 2015 to be tax deductible. Accounts payables (amounts you owe) Please list any amounts you owe as at 31 March Wages & ACC Please supply: Employer deduction schedules (IR345); and Employer monthly schedules (IR348); and Copies of ACC invoices/received. Legal expenses Please provide invoices for any legal fees incurred. Fixed assets Please supply copies of invoices for all assets acquired during the year that exceed $500, exclusive of GST. Please also supply details of any assets you sold or wrote off and also copies of any hire purchase agreements and other relevant documents. Total ($) Assets purchased. Assets sold. Assets scrapped/written off. Holiday pay $ Owed as at 31 March Paid 1 April 2015 & 2 June Payments to contractors/subcontractors Please provide details of payments made to contractors/subcontractors and any tax with-held. Goods and services tax (GST) Please supply copies of GST returns for the tax year, along with your workings (unless we prepared them). Fringe benefit tax (FBT) Please supply copies of all FBT returns for the tax year, along with your workings. Insurance Please provide details of insurance expenses paid for the year, including invoices and policies. Home office and storage If you maintain an office at home used exclusively for business, please complete the attached home office claim form (see page 5) or alternatively send us invoices, bank statements and loan statements relating to your home office. Loans, overdrafts, hire purchase & leases Please supply details of any loans, overdrafts, hire purchase and leased during the year, including: Statements for the whole year; New borrowings during the year; Borrowings repaid or settled during the year; New/settled hire purchase agreements; Non-cancellable leases. Repairs and maintenance Please provide details of any major repairs and maintenance to business assets during the year. As long as you are going to be thinking anyway, think big - Donald Trump Page 3

6 Motor vehicle If you used a privately owned motor vehicle for your business you must generally keep a log book for a period of 3 months to calculate the business portion. This percentage will then be used for the next 3 years at which time a new log book may need to be kept. If you have not kept a log book for any vehicle which has private use, the maximum deduction is 25%. Please supply your log-book or motor vehicle expenses if not already claimed in GST return(s). Entertainment Most entertainment is restricted to 50% deductibility for tax. However, some are 100% deductible - eg overseas expenditure on entertainment, business travel expenditure. Business structure/ownership changes Please advise us if you have changed (or are planning to change) ownership or business structure. Inter-company and related party balances Please supply details of any inter-company/related party accounts including details of each transaction. Contingencies & capital commitments Please supply documentation and details on any: Matters which may lead to a future gain or loss, but which remain uncertain at 31 March 2015; Amounts committed (but not yet paid for) to capital expenditure as at 31 March 2015; Non-cancellable operating lease commitment as at 31 March Please supply: Receipts or a list of business entertainment conducted in New Zealand; Details of how adjustments were made in your GST return(s), if applicable. Income in advance Please provide details of income received in advance. Interest and dividends Please provide statements detailing interest and dividends received. Rental income Overseas income Please provide details of all overseas income using our overseas income checklist on page 9. Basis of Accounts Preparation If you specifically require NZ GAAP accounts, please contact us. If you do not trade as a company, unless otherwise instructed by you we shall only prepare special purpose financial statements that may be used as a base from which income tax returns can be prepared. Such financial statements may not comply with New Zealand Generally Accepted Accounting Practice (NZ GAAP) as declared by the New Zealand Institute of Chartered Accountants. Please complete the rental income form on page 6. I praise loudly; I blame softly Queen Catherine II Page 4

7 Home office schedule If you use a home office to manage your business, you may be able to claim a percentage of home expenses. The percentage that you may claim is based on the size of your office compared to the size of your home. Please complete the following: $ Electricity & gas... Home & Contents Insurance... Rent... Mortgage interest... Rates and water rates... Repairs and maintenance (*)... Other (Provide details)... Other (Provide details)... (*) Please provide invoices/receipts Apportionment calculation If you have supplied details of your house and the area used for business purposes to us in prior years and the details are unchanged, you do not need to supply this information. However, if you haven t please supply the following details: Apportionment m² Total area of the house, shed & garage.. Area used for home office/ storage.. Look through Company (LTC) The ability for owners in LTCs to deduct their losses is dependent on having sufficient owner s basis. The LTC must complete a tax return that includes the amount of income or deductions for the company for the income year, the amount of income for each owner, and a summary of deductions for each owner. The company isn t taxed, but each owner must prepare a separate income return taking into account the amounts shown on the company s income return. The amount of deduction an owner can use is limited to their owner s basis, which is the adjusted tax value of their investment in the LTC To establish if you are able to deduct your losses, please provide the following information: Investments: Details of goods or assets introduced or services provided to the LTC, or amounts paid by you on behalf of the LTC, including loans, including shareholder current account deposits, and your share of any LTC debt which you have guaranteed or provided indemnities for. Distributions: Details of anything paid to you by the LTC, including dividends, loans and drawings. Please exclude any salary or wages paid by the LTC to you as a working owner. Income: Share of income, including exempt/excluded income, capital gains from the current/prior tax from the years company was LTC. Deductions: Your share of deductions & losses in prior tax years that the company was an LTC. Champions keep playing until they get it right - Billie Jean King Page 5

8 Rental income Please complete this form if you have received any rental income during your financial year. Property address Rental period Please advise how many days the property was available for rent:. days Family/associated person tenants Please supply an independent market rental valuation if it was rented for less than market rental. Property management Please supply copies of any statements received from property management companies/agents. Loans Please supply details of any loans including: Statements for the whole year; New/settled borrowings during the year. Travel expenses Please advise the total number of kilometres (round trip) you travelled to inspect the property, meet with tenants, estate agents, solicitors, accountants, etc. Total kilometres. Number of trips per annum. Property income & expenses Please supply your rental property bank statements or cash book with details of all related transactions marked, or complete the following table: $ Rent received or receivable... Advertising... Bank charges... Body corporate fees... Insurance... Mortgage repayment insurance... Mortgage interest... Lawns and ground maintenance... Legal fees (Please attach copies)... Loan fees... Property magazines, etc... Property management fees... Rates and water rates... Repairs and maintenance... Valuation fees if re-financing... Capital improvements... Other (Please provide FULL details if... these are significant) Assets/chattels Please supply copies of any invoices or receipts relating to assets bought or sold during the year. Chattels on new properties that you have bought can be depreciated. IRD advises that if an item is part of the building, it cannot be depreciated separately but must be depreciated as if it was part of the building, which will result in a lower depreciation expense. If you have a chattels report, you may depreciate your chattels at a higher rate. If you don t have a chattels report but would like to claim a higher depreciation rate, please provide details of the items you would If we did all the things we are capable of doing, we would literally astonish ourselves -Thomas Edison Page 6

9 like to depreciate and your own assessment of their value as 2nd hand items. Please retain some evidence on your assumptions in case the IRD ask you to justify these figures. Repairs & maintenance Please advise if you would like us to complete this form for you. Yes No If nothing is selected, we ll assume that you do not want us to prepare this form. Please supply copies of all invoices that are for $500 or more. Home office expenses If you use a home office to manage a portfolio of properties, you may be able to claim a percentage of home expenses. The percentage that you may claim is based on the size of your office compared to the size of your home. Please complete the schedule on page 5. Australian properties Please provide details of how much non-resident with-holding tax (NRWT) or Approved Issuer Levy (AIL) you paid. If you visited your property, please provide details of any trip costs & total length of your trip & how many days were dedicated to property related matters. Trips to secure and acquire property are NOT tax deductible. This section has been intentionally left blank IR23B Alternative tax code You may estimate your tax loss for the tax year ending 31 March If you re a salary or wage earner, you may be able to adjust your tax code so that you pay less PAYE throughout the year. If you aren't making any mistakes, it's a sure sign you're playing it too safe John Maxwell Page 7

10 Personal taxable income checklist Interest and dividends Please supply details of the source and amount received. Dividend, interest and bonus issue advice slips are required to show interest withholding tax paid on your behalf and imputation tax credits available to you. Please note we will require dividend and interest advice slips for any joint investments. Portfolio investment entities (PIEs) Please supply any investment summary schedules you ve received for the year including details of the Prescribed Investor Rate (PIR) used. Profit or Loss from Look Through Company Please supply details of company, shareholding percentage and share of net profit/loss (we will contact you regarding calculation of your Owner s Basis under LTC loss limitation rules). Other income Please supply details of the source & amount received, including rent, partnership, trusts/estates, overseas income and any other income received. donations to schools, churches & charitable organisations. Please note that you cannot claim for activity or stationery fees; or specific activities such as school trips, or attendance dues. Income protection insurance If you have income protection insurance, please supply a letter from the insurance company confirming the annual premium. Working for Families Tax Credits (WFFTC) You may be eligible to receive WFFTC for children if they are 15 or younger; 16 or 17 and are not financially independent (i.e. not working an average of 30 hours or more a week or receiving a benefit, student allowance or other government assistance); or 18 and still studying at secondary school or a tertiary institution and not financially independent. If you have children who meet these criteria please provide details including full name, date of birth, date child started living with you if different from date of birth, and their IRD number. Please advise if you receive any other financial support or benefit for the child. Provisional Tax Please provide details of any matters that may cause your 2016 residual income tax to be significantly different from your 2015 position. Donations tax credit If you d like us to complete the IR526 (donations rebate) claim form, please supply receipts for Please also let us know if you: Married, separated or changed your family circumstances during the year? Paid/received maintenance to/from any person during the year? Were you a full time wage/salary earner during the year? (20 hours/week for single parent; 30 hours/week for couples) If so, for how many weeks of the year? Y/N Y/N Y/N. I have failed over and over again - that is why I succeed - Michael Jordan Page 8

11 Overseas income Please contact us to discuss any overseas income or investments if you are not sure whether these need to be included in your accounts/tax returns. Details of shareholdings or investments held by each company, its subsidiaries, other companies, public listed companies etc; Details of foreign taxes paid / payable. Salaries from overseas companies Please supply details of source and amount received. Interest from overseas bank accounts For foreign exchange movements, please indicate whether you are a cash basis holder or whether accrual rules apply. To be a cash basis holder: Your total holdings of all financial arrangements must be less than NZ$ 1.0 million; or Your income and expenditure under all financial arrangements must not exceed NZ$ 100,000 Shareholding in foreign companies / unit trusts (including closely held companies) For shareholding of less than 10%, please supply: A list of shares at 1 April 2014 and 31 March 2015 Investment purchases / sold during the year and cost of purchases / disposals Market values 1 April 2014 and 31 March 2015 Dividends received For shareholdings exceeding 10%, please supply: Details of company s capital structure & shareholding, including share classes; Number of shares and class types held; Details of the number of shares and class(es) held by relatives, related trusts and companies; Copy of the balance sheet & P&L (including notes) for the year-end falling in the 2015 income tax year; Miscellaneous Please supply details of the following, if applicable: Income from rental properties situated outside New Zealand (including details of loans associated with them); Share trading income derived from outside of New Zealand; Taxes paid / payable outside New Zealand; Trusts settled outside New Zealand during the year and / or gifts or interest free loans made to trusts outside New Zealand; Distributions (capital or beneficiary income) from trusts outside New Zealand; Overseas superannuation funds interest held and whether they are employment related or not Funds received or transferred from overseas superannuation funds; Life insurance policies owned; Business income from outside New Zealand; Royalty income. Note: If applicable, please supply separate details for individual family members. I am a slow walker... but I never walk backwards - Abraham Lincoln Page 9

12 Other information If you have any other comments/notes relevant to our end of year that you think we may need to be aware of, please use this page to list them. If you don't know where you are going, every road will get you nowhere Henry Kissinger Page 10

13 Acknowledgement I/We authorise Business Advisory Accounting & Tax Services Limited (hereafter to referred to BAS ) to act on my/our behalf in respect of the Inland Revenue Department for the purposes of obtaining any information necessary with regard to the administration of my/ our income tax account (and other tax accounts) as they deem relevant. I may revoke this authority any time. I/We authorise any person or company to provide BAS with such information as BAS may require to complete the Financial Statements, and/or Tax Return, and any other work BAS carries out on behalf of myself/ourselves. I may revoke this authority any time. I/We further authorise BAS to furnish to any third party, financial information of mine/ours as BAS sees appropriate that is requested in furtherance of our business activities. I/We accept responsibility for the accuracy and completeness of the information supplied. BAS is not required to complete an audit, nor do I/we wish BAS to undertake a detailed review of my/our affairs in order for BAS to substantiate the accuracy of the information I/we have supplied BAS, and therefore BAS is not asked to provide any assurance on my/our financial statements. I/we acknowledge that BAS work cannot be relied upon to detect error and fraud and that the financial statements and/or tax return(s) will be prepared at my/our request and for my/our purposes only and that BAS will not be liable for any losses, claims or demands by any 3rd party. I/We accept responsibility for all other records and information supplied to BAS other than those listed above. I/We accept responsibility if I/We fail to supply all relevant records and information to BAS, BAS may consider all balances to be NIL or NO where I/We do not supply this information. If I/we do not return any associated income tax declarations within 10 business days (excluding the period 23 December 2015 to 11 January 2016) of BAS sending them to me/us, BAS may assume that I/we have signed them unless I/We provide alternative instructions. In this case, BAS has my/our express permission to file them with the Inland Revenue, without delay, and BAS may assume that the return(s) is/are true and correct and represents my/our assessment for the related year as required under the Tax Administration Act I/we have been advised of the basis that BAS charges its fees and that I /we have read BAS terms and conditions. By signing this document, I/we agree to be bound by them. Should BAS not receive such a signed copy but I/we continue to instruct BAS, then I/we acknowledge that I/we have accepted the terms and conditions and BAS terms of business. Signature Name Capacity Date Signature Name Capacity Date Success is a journey, not a destination - Mark Gwilliam Page 11

14 Need to contact us? Please provide your details Telephone: Facsimile: Business name (if applicable) General Mail: PO Box Takapuna Auckland 0740 IRD number(s) Contact details to ensure our records are up to date, please complete the following: Physical address: 217a East Coast Road Campbells Bay Auckland 0622 Please visit our website at for further information. You can also check out our articles and newsletters and other resources. Preferred contact number Alternative contact number Preferred address Website Preferred postal address How to obtain copies of the guide You can download copies of this guide by going to.you can also request copies by calling us on or us at If you re unhappy with our service We re fully committed to providing you with a quality service. If there s a problem, we d like to know about it and have the chance to fix it. You can call the staff member you ve been dealing with or, if you re not satisfied, ask to speak with our Director, Mark Gwilliam, on / or him at markg@bizadvice.co.nz DISCLAIMER: The information contained in this guide is of a general nature and does not constitute legal, tax, investment or other professional advice on any subject matter and/or address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any financial decision you should consider all factors and consult an appropriate professional advisor. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. No liability is accepted by Business Advisory Accounting & Tax Services Limited or its staff, directors and contractors for actions taken in reliance upon the information given and it is recommended that appropriate professional advice should be taken before making any decision or taking any action that might affect your finances.